[wanabidii] RE: CAG REPORT

Asset Management

I noted that NSSF spent a sum of Shs. 234.1 billion in the

construction of some of the buildings of the University of

Dodoma (UDOM), under contract terms of Design, Build, Own

and Transfer after 10 years. Other Funds PSPF, LAPF, NHIF

and PPF spent a total of Shs.181.3 billion in construction of

buildings of the Dodoma University under the same terms of

contract. The constructed buildings are neither in the books

of University of Dodoma nor in the books of the Pension

Funds. This has been caused by different understanding of

the parties concerned. Pension Funds understand that

amount used to construct the buildings was the loan to the

Government while on the part of Government understands

was an investment of the Pension Funds.

Further, I noted non performing loans with a sum of Shs.91.7

billion and USD 9.65 million. The amount was loaned for the

constructions of Bunge Hall, Police houses and Machinga

Complex at Dar es Salaam City Council. Others were used to

finance, General Tyre East Africa Ltd, Kiwira Power Coal

Mining, Dar es Salaam Cement Company, Continental Venture

Limited, Kagera Sugar Co. Limited and Medtch Industrial Co.

Limited under the Government guarantee.

The non performance of these loans guaranteed by the

Government exposes the Pension Funds to high risk of losing

the members' funds and therefore jeopardising the ability of

further re-investing. In addition, I have noted with concern

on the non repayment of the loaned funds from the Pension

Funds and the non payment by the Government of the

guaranteed amounts due to the failure of those who have

been guaranteed as per the loans agreements and which is

contrary to the loans and Guarantees Act of 1974.